BILL NUMBER: AJR 10	CHAPTERED  07/19/99

	RESOLUTION CHAPTER   71
	FILED WITH SECRETARY OF STATE   JULY 19, 1999
	ADOPTED IN ASSEMBLY   JULY 15, 1999
	ADOPTED IN SENATE   JULY 12, 1999
	AMENDED IN SENATE   JUNE 28, 1999
	AMENDED IN SENATE   JUNE 21, 1999
	AMENDED IN ASSEMBLY   MAY 12, 1999

INTRODUCED BY   Assembly Member Leonard
   (Coauthors:  Assembly Members Cox, Cunneen, Dutra, and House)
   (Coauthor:  Senator Vasconcellos)

                        MARCH 11, 1999

   Assembly Joint Resolution No. 10--Relative to the export of
cryptographic products.


	LEGISLATIVE COUNSEL'S DIGEST


   AJR 10, Leonard.  Cryptographic products.
   This measure would memorialize the President and the Congress to
consider the relaxation of current United States export control laws
governing cryptographic products, as specified, and to discourage the
implementation of a federally mandated "key recovery" program.




   WHEREAS, Current United States export control laws governing
cryptographic products are adversely affecting California and
American companies; and
   WHEREAS, With California poised to greatly benefit from the rapid
growth of electronic commerce, which is predicted to amount to as
much as $200 billion per year by the year 2000, outdated
cryptographic provisions dating back to World War II and the Cold War
retard the ability of California producers of cryptographic products
to compete and succeed in the global market; and
   WHEREAS, There exists a tremendous worldwide market for
cryptographic products incorporating secure encryption features; and
   WHEREAS, Foreign competitors of data-scrambling technology,
unfettered by strict government export controls on cryptographic
products, are able to successfully develop, market, and sell
sophisticated encryption systems well above the United States limit;
and
   WHEREAS, Any benefit to American law enforcement or national
security realized by American export controls on cryptographic
products has been minimized by the rapid availability of strong,
robust cryptographic systems produced by non-American companies and
even by the ability to lawfully import these systems into the United
States; and
   WHEREAS, The Computer Systems Policy Project estimates that if the
current outdated policy remains in effect, the cost to American
companies could be up to $96 billion by the year 2002 and the loss of
over 200,000 high-skill, high-wage jobs by the year 2000; and
   WHEREAS, The National Research Council of the National Academy of
Sciences has concluded after exhaustive study that United States
export controls on cryptography may be causing American software and
hardware companies to lose a significant share of a rapidly growing
market, with losses of at least several hundred million dollars per
year; and
   WHEREAS, The current administration supports a "key recovery"
system that would force computer users to give the government access
to their encryption keys, thus allowing the federal government to
monitor an individual's communications and on-line transactions
without that individual's knowledge or consent; and
   WHEREAS, There is pending in the United States Congress H.R. 850,
which will substantially ease or eliminate current federal export
controls on American cryptographic products, and other legislation
related to cryptography and export controls is being introduced and
considered in the Congress; now, therefore, be it
   Resolved by the Assembly and Senate of the State of California,
jointly, That there be greater discussion between industry,
government, and the public in this policy area; and be it further
   Resolved, That the Legislature of the State of California
respectfully memorializes the President and the Congress of the
United States to act immediately to consider the relaxation of
current United States export control laws governing cryptographic
products and to discourage the implementation of a federally mandated
"key recovery" program; and be it further
   Resolved, That the Chief Clerk of the Assembly transmit copies of
this resolution to the President and Vice President of the United
States, to the Speaker of the House of Representatives, and to each
Senator and Representative from California in the Congress of the
United States.
